During the fiscal year 2010-2011, we extended our efforts to elucidate the DNA sequence patterns guiding rotational and translational positioning of nucleosomes. In particular, we developed a novel DNA threading algorithm correctly predicting positioning of 70 % nucleosomes precisely mapped in vitro. This is based on our earlier analyses of the DNA deformability in crystal structures (the so-called knowledge-based approach) as well as on new unpublished results obtained in the course of theoretical conformational analysis of DNA. To this aim, we ran all-atom energy minimization of numerous double-stranded DNA fragments undergoing conformational transitions similar to those observed in crystallized nucleosomes. In other words, combining together the crystal structures with the results of computer simulations of DNA, we have significantly extended the list of flexible DNA sequences which are ready to accommodate the distortions imposed on nucleosomal DNA by histones. This combined approach allowed us to make an important step forward, toward understanding the nucleosome code encripted in genomic DNA. The folding of DNA in nucleosomes is accompanied by the lateral displacements of adjacent base pairs, which are usually ignored. We have found, however, that the shear deformation, called Slide, plays a much more important role in DNA folding than was previously imagined. First, the lateral Slide deformations observed at sites of local anisotropic bending of DNA define its superhelical trajectory in chromatin. Second, the computed cost of deforming DNA on the nucleosome is sequence-specific: in optimally positioned sequences the most easily deformed base-pair steps (CA:TG and TA) occur at the sites of large positive Slide and negative Roll (where the DNA strongly bends, or kinks, into the minor groove). Here, we incorporate all the degrees of freedom of 'real'DNA, thereby going beyond the limits of the conventional model ignoring the lateral Slide displacements of base pairs. Note that our results are in remarkable agreement with the in vitro sequence selection (SELEX) experiments. The successful prediction of nucleosome positioning for sequences of various GC-content demonstrates the potential advantage of our structural analysis, based on calculations of the DNA deformation energy. In this regard, it is important that our knowledge-based model of nucleosome positioning takes into account the sequence-specific effects caused by linker histones (LH). LHs demonstrate a higher affinity for the AT-rich sequences at the entry-exit points of nucleosomes, which is consistent with a general tendency of AT-rich DNA for a tight compactization in chromatin. On the other hand, the GC-rich promoters are often depleted of nucleosomes and thus are easily accessible for transcription machinery. The situation is quite different, however, when DNA is methylated. In this case, the stability of nucleosomes in particular, and of chromatin in general, is increased, the promoters become less accessible, and the level of transcription is significantly decreased. The methylation-induced silencing of tumor suppressor genes is frequently related to human cancer. We link this epigenetic effect with the sequence-specific properties of LHs, known to have a higher affinity not only for the AT-rich sequences, but also for the methylated DNA. According to our model, the LHs bind to thymines and methylated cytosines through hydrophobic interactions in the major groove (published in Nucleic Acids Research). Our new experimental data confirm the model postulating hydrophobic interactions between the linker histone H1-0 and the AT-rich fragments embedded in the linker DNA. Mutating the DNA sequence at the entry-exit point in nucleosome, we demonstrated that indeed, the presence of thymine cluster in the predicted position does increase the affinity of histone H1-0 to nucleosome. Our next step is to study interactions of the linker histone H1-0 with methylated DNA. In this regard, it is important that the H1-0 variant of linker histone is involved in terminal differentiation. Therefore, we anticipate that our efforts may help understanding the molecular mechanisms responsible for the epigenetic effects caused by DNA methylation in particular, the roles played by different H1 variants. Analysis of the nucleosome positioning in vivo allowed us to demonstrate that there are two kinds of translational positioning signals in genome: one is species-independent (universal), inherent in all nucleosome sequences studied so far, including yeast, fly, nematode and chicken. The other signal is yeast-specific. We are interpreting these new data based on the available crystallographic structures of nucleosomes.